ABC: Romney has millions parked in funds in the Caymans

posted at 6:15 pm on January 18, 2012 by Allahpundit

A Twitter buddy reminds me that this is technically old news. The LA Times published a long, detailed piece about it in 2007. But then, Romney’s support for the mandate is also technically old news and yet Republicans care about it a lot more this time than they did last time. As the national debate changes, so do the issues that matter to voters. Go figure.

Does this matter?

In addition to paying the lower tax rate on his [domestic] investment income, Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans…

Romney campaign officials and those at Bain Capital tell ABC News that the purpose of setting up those accounts in the Cayman Islands is to help attract money from foreign investors, and that the accounts provide no tax advantage to American investors like Romney. Romney, the campaign said, has paid all U.S. taxes on income derived from those investments.

“The tax consequences to the Romneys are the very same whether the fund is domiciled here or another country,” a campaign official said in response to questions. “Gov. and Mrs. Romney have money invested in funds that the trustee has determined to be attractive investment opportunities, and those funds are domiciled wherever the fund sponsors happen to organize the funds.”…

Tax experts agree that Romney remains subject to American taxes. But they say the offshore accounts have provided him — and Bain — with other potential financial benefits, such as higher management fees and greater foreign interest, all at the expense of the U.S. Treasury. Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice, said the federal government loses an estimated $100 billion a year because of tax havens.

Supposedly, Bain Capital maintains no fewer than 138 “secretive offshore funds” in the Caymans. To reiterate: No one’s claiming that Romney is using a tax shelter for his own money here. He’s paying the normal rate. (ABC’s headline is highly misleading on that point.) The claim, rather, is that the funds created by him and Bain operate as a tax shelter for other investors — specifically, per the LA Times piece, nonprofit institutional investors like pension plans and university endowments, which can avoid the 35 percent federal tax on “unrelated business income” by investing in an offshore hedge fund instead of a domestic one. Those investors get a little extra cash from that tax break plus higher foreign interest, Bain and Romney get some extra cash from higher management fees plus the profits that came from attracting additional investors, and everyone’s happy — except the IRS.

Which brings us back to the key question: Does this matter? Not as much as it would if Romney was sheltering his own dough, certainly, but it’s easy to imagine The One on the stump this fall talking about Mitt and his old company (whose profits he still shares in) making bank by helping others avoid the taxman while Joe Sixpack has no recourse but to pay up. If you think that’s a big nothingburger and are willing to go to war to defend perfectly legal tax shelters, okay, but this is yet another reason why we’d better see Romney’s tax returns now, not later. I appreciate Mitt not wanting to provide Democrats fodder for class-war demagoguery, but if we’re going to invest in Romney Inc in hopes of a big dividend in November, let’s see a prospectus so that we know exactly what liabilities we’re taking on. Read NRO’s new editorial for more on that.

Update: After re-reading the LA Times piece, it looks like I conflated two different funds above. It’s a shell company in Bermuda, not the Caymans, that helps institutional investors avoid certain taxes. The Caymans shell company is aimed at “shield[ing] foreign investors from U.S. taxes they would pay for investing in U.S. companies.” Same left-wing political attack applies — Bain and Romney are helping their wealthy clientele to avoid paying their “fair share” in taxes — but the specifics are apparently a bit different.

Update: ABC’s now changed the headline. It used to read “Romney Parks Millions in Offshore Tax Haven.” Minor problem: It’s not actually a tax haven for him. He pays the same tax on that money as he does on his U.S. investments. Now the headline reads “Romney Parks Millions in Cayman Islands.”

AD FEEDBACK
Marianne Gingrich has said she could end her ex-husband’s career with a single interview.
Earlier this week, she sat before ABCNEWS cameras, the DRUDGE REPORT has learned… MORE… Developing…

Meh. Guy makes money and chooses to keep most of it himself. Best I can recall from my time in MA during his term, he didn’t take a salary. Don’t see ABC reporting this. Also seem to remember Barry Soetoro utilizing extensive tax-reduction strategy for his money. Just another MFM hit job. Meh.

So the Obamamedia doesn’t want to tank Newt, because it will help Romney. Seems like a pretty strong signal to who they fear…

How can this be seen as anything other than ABC trying to prop up and protect Newt? Ethics? Give me a break. The don’t have no stinkin’ ethics. They are there to get Barack re-elected. If it two two days before a Newt-Obama debate, raise your hand if you think ABC would “hold” the story?

Actively campaigning for a presidential candidate while masquerading as a journalist is as unethical as it gets. They think Newt in the race helps Barack. That’s all.

Got it. Who doesn’t want him vetted? Where are the “Democrat” type defenses. And what demerits you feel may be used against him in the general, I, and others, may not perceive as demerits. Any Republican is going to be slammed as a rich, out-of-touch, white guy. Might as well actually be one… that the general public doesn’t measurably hate as much as Rick, Newt, Rick, or Ron.

So ABC is trying to decide whether to air it before the primary or after the primary? What if he’s the nominee? Would they air it in the general?
If the answer is ‘yes’, then they should air it in the primary.

This guy is damaged goods in a General Election. There is no way Mitt Romney can get elected to the Presidency. I understand he may very well be a rational choice for Republicans to nominate, he looks great on paper, but when Axlerod and company start the class warfare, you can throw all reason out the window for the average voter. I saw this in Ohio on Issue 2, the collective bargaining law. The conservative groups tried sound arguments based on reason and the unions played to emotion and class envy. Guess who won?

She spoke to ABCNEWS reporter Brian Ross for two hours. Her explosive revelations are set to rock the campaign. But now a “civil war” has erupted inside of the network, an insider claims, on exactly when the confession will air!

She spoke to ABCNEWS reporter Brian Ross for two hours. Her explosive revelations are set to rock the campaign. But now a “civil war” has erupted inside of the network, an insider claims, on exactly when the confession will air!

OT: If it’s true that Newt’s Ex, Marianne, is ready to drop a bomb on him, do you think it might be a little payback for his “modest” Tiffany acquisitions for the benefit of Ballista Callista. Hell hath no fury …

I know everyone is automatically assuming she is going to destroy Gingrich, but what if she came out and threw herself under the bus or something and supported him. I know, I sound like a crazy person. They do say “confession” though on drudge.

I think the problem with this logic is there is not enough time for all of his supporters to abandon ship ahead of the SC primary. Basically whoever benefits won’t get all of the support until maybe at the earliest Florida.

ABCNEWS suits determined it would be “unethical” to run the Marianne Gingrich interview so close to the South Carolina Primary.

This is BRILLIANT from ABC News. They get the net to hype up the interview for free for a couple of days, and CNN will OBVIOUSLY bring it up in the debate. Then they air it either right before or right after the SC primary for maximum damage.

Oh! Give me a break. The only “ethical” concern here is airing it now before a pivotal primary race or saving it for later because you think Newt will go further and you might need to save it for then.

I know everyone is automatically assuming she is going to destroy Gingrich, but what if she came out and threw herself under the bus or something and supported him. I know, I sound like a crazy person. They do say “confession” though on drudge.

thphilli on January 18, 2012 at 7:10 PM

You forgot this part:

Marianne Gingrich has said she could end her ex-husband’s career with a single interview.

I was just talking to a friend on the phone about the Drudge siren. All I did was read him exactly what Drudge has right now on his headline, about “the suits” saying it is unethical to air it this close to the SC primary. The first words out of my friend’s mouth were: “That means they don’t want Romney to be the candidate. They’re protecting Newt.” Yup.

Wait.
Are you telling me that people manipulate our arcane and labyrinthine tax code to their advantage?
Well! Knock me over with a feather!M240H on January 18, 2012 at 6:23 PM

It’s only rich conservatives who conduct such behavior.

The rich liberal/socialists who actually crafted the current tax to ensure that the poor and needy are taken care of, don’t do that kind of stuff. Most of them pay the maximum tax that the code says applies to their income bracket. The rest will give even MORE than the tax code requires, because they have such charity of heart towards the poor and downtrodden, am I right?I SAID, AM I RIGHT? !

They would release it if it helped Newt, so I’m sorry for those thinking that maybe she admits her own fault, but I just don’t see it happening. Newt is going to get hit hard, because even if he wins SC, he has to deal with these headlines.

Also, it is unethical for ABC to hold it knowing it gives Newt time to prep a defense which is total BS.

Irony that this is happening before the SC primary knowing that Sanford got in trouble for the same thing :D!

This guy is damaged goods in a General Election. There is no way Mitt Romney can get elected to the Presidency. I understand he may very well be a rational choice for Republicans to nominate, he looks great on paper, but when Axlerod and company start the class warfare

I’m not Mitt fan but this has been waiting to happen ever since her VF interview last year. This is one of the reasons I never could back Newt. THe political junkie on a blog says “meh, this is trivial” but many people pay attention, perk up and vote based on this kind of news.

Yeah, it feels like this was a Romney ace under the table. Sleazy all around.

That ABC News wanted to hold this is a bigger story than the story itself.

Translation; Some at ABCNews wanted to hold this interview, so that if Newt won the nomination, they could use it against Newt when he was up against Obama.

Again, don’t be surprised if the handling of this interview isn’t a bigger issue than the story itself.

fatlibertarianinokc on January 18, 2012 at 7:14 PM

Uh Huh so which network is going to interview Newt’s ex now before the South Carolina primary vote? It would be a big get? NBC? Just because ABC won’t air some interview they have doesn’t mean she can’t speak to another network.

ABCNEWS suits determined it would be “unethical” to run the Marianne Gingrich interview so close to the South Carolina Primary.

These are the same suits who decided that ABC could hold GWB and John Kerry to different standards in their reporting. While not quite as blatant as the CBS decision to fake documents in coordination with the Kerry campaign, ABC is hardly a fair outlet for news. They only think that Gingrich will go further and they can use this bitter accusations of an ex to better benefit then.

So ABC is trying to decide whether to air it before the primary or after the primary? What if he’s the nominee? Would they air it in the general?
If the answer is ‘yes’, then they should air it in the primary.

If it isn’t news, they should destroy it.

MayBee on January 18, 2012 at 7:08 PM

I find this Drudge update hysterical.

ABCNEWS suits determined it would be “unethical” to run the Marianne Gingrich interview so close to the South Carolina Primary.

Releasing this last second in a general election campaign if Newt were running against Obama would annihilate him. Also with the collusion of big business, and corporate media – it could be as simple as MONEY or the fear of litigation.

But someone at ABCNews knew exactly what to do – leak it to Drudge and cause a shit storm and now ABCNews virtually has to release it.

OK, so I read on here that Romney needs to release his tax records so we know he isn’t hiding anything embarrassing and so he is properly vetted before he becomes the nominee.

But given Newt’s scandelous past, shouldn’t we say he needs to let all the skeletons out of the closet so we know what we are getting into? Do we want to nominate a guy only to find out that his ex has dirt that will pummel him in the general. Surely everyone agrees with me.

A decision was tentatively made to air the interview next Monday, after all votes have been counted.

Seriously, this is why executives get paid big money. They are going to get MASSIVE ratings on this interview because everyone will be talking about it for half a week. It will be brought up in the debate, etc.

Yeah, it feels like this was a Romney ace under the table. Sleazy all around.

BoxHead1 on January 18, 2012 at 7:17 PM

If this exwife interview was a Romney ace, Romney wouldn’t have been spending millions on attack ads against Gingrich. This interview plus the ads would be like overkill, hell it would be like killing three generations and pissing on their graves.

Speaking of Romney, the Headline thread about McCain’s “Opposition Research Book” has moved off the front page. For those who missed my 7 PM post in that thread, here ’tis:

Let’s examine this BuzzFeed “find” a bit more closely…

Right off the top, BuzzFeed admits:

A document found online by BuzzFeed appears to be John McCain’s entire, 200-page opposition research file — or “book” — on Mitt Romney from 2008, the year they were bitter rivals.

Translated: BuzzFeed cannot prove that it did in fact come from McCain.

Segments of the book have been posted on RedState.com, but this the first time the document has been shared for public consumption in its entirety.

Yet when you go to the BuzzFeed link, there’s absolutely no Cover Page, no Introduction or Forward page, no credits as to who assembled it, nothing. No, the “complete document” begins at the Table of Contents!

And speaking of that Table of Contents, that is suspicious as well, as the vast majority of Tables of Contents in books mark each page at the bottom with Roman Numerals. This “book” does not.

Likewise, when you get to Page 200, the “complete document” has absolutely no Index or other things one typically finds at the end of a “book” such as “about the authors” or footnotes.

And when you get to the last 20 pages or so, the “research” on Romney turns out to be nothing more than links to news stories and editorials generated by the Democrat Media. That’s not “research” in the classical sense, it’s web-surfing to find date to support a pre-determined conlcusion. Whoever put this together even cited far Left sites like The New Republic as “research sources”.

In addition, how did BuzzFeed just “happen” to find this today, 3 days before the SC Primary?

Several prominent bloggers are already questioning the authenticity
of this “complete document” that is not a “complete document” at all.

Certainly there are enough issues raised here to question its origin. But you Dan Rathers seem to be perfectly OK with that, because the “complete document” says what you want to believe.